Unit: Management accounting
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| Date | Quantity | Price per unit |
| (Units) | (Sh.) | |
| 13 | 2,000 | 190 |
| 20 | 2,400 | 195 |
| 25 | 3,200 | 200 |
| 28 | 1,000 | 190 |
| Date | Quantity | Price per unit |
| (Units) | (Sh.) | |
| 3 | 700 | 230 |
| 4 | 1,000 | 225 |
| 16 | 800 | 230 |
| 24 | 1,800 | 215 |
| 26 | 3,800 | 220 |
| 1. | The closing inventory for the month of June 2025 was 5,000 units valued at Sh.900,000. |
| 2. | During the month ended 31 July 2025, the following returns were made by customers:
|
| 3. | On 22 July 2025, the officer in charge of inventory detected a shortage of 100 units. |
| 4. | Operating expenses for the month of July 2025 amounted to Sh.44,500. |
| 5. | The company uses last in first out (LIFO) method to value its stock. |
| Sh. | |
| Direct materials | 60,000 |
| Direct labour | 20,000 |
| Machine setup cost | 6,000 |
| Design and logo | 30,000 |
| Prime cost | 116,000 |
| Raw material input | 60,000 kilograms at a cost of Sh.3,810,000 |
| Abnormal gain | 1,000 kilograms |
| Direct labour cost | Sh.1,800,000 |
| Direct expenses | Sh.540,000 |
| Production overheads | 110% of direct labour cost |
| 1 | Opening work in progress was 900 units at a total cost of Sh.45,000,000. The degree of completion is as follows:
|
| 2 | Data about refining process is as follows:
|
| 3 | Finished units transferred to finished stores were 7,800 units. |
| 4 | Normal scrap loss was 10% of input units and the scrapped units realised Sh.30,000 per unit. |
| 5 | Units scrapped were 1,200 units with the following degrees of completion:
|
| 6 | Closing work in progress was 1,000 units with the following degrees of completion:
|
| 7 | Hard Board Ltd. uses first in first out (FIFO) method. |
| Joint Products | Production Kgs | Selling price at split-off point (Sh. per kg) | Separation cost if sold at split-off (Sh. per kg) | Separation costs if processed further (Sh. per kg) |
| AX | 322,000 | 435.90 | 125.90 | 42 |
| AY | 600,000 | 350.90 | 44.90 | 28 |
| ABC Ltd. incurred the following joint costs: | Sh.“000” |
| Conversion costs | 125,000 |
| Curing cost | 80,000 |
| Fermentation cost | 120,000 |
| Total joint cost | 325,000 |
| Sh. "000" | |
| Raw materials cost | 268 |
| Initial processing cost | 264 |
| Conversion cost | 200 |
| Product | Output (litres) | Sales (Sh.000) | Additional processing cost (Sh.000) |
| C | 400,000 | 768 | 160 |
| F | 90,000 | 232 | 128 |
| T | 5,000 | 32 | - |
| S | 9,000 | 240 | 8 |
| Product | Selling price per litre (Sh.) | |
| C | 1.28 | |
| F | 1.60 | |
| T | 6.40 | |
| S | 20 |
| A | B | |
| Materials (units) | 1,000 | 70 |
| Cost of materials per unit (Sh.) | 125 | 200 |
| Wages (Sh.) | 28,000 | 10,000 |
| Other direct expenses (Sh.) | 8,000 | 5,250 |
| Output in units | 830 | 780 |
| Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Total marketing expenses (Sh."000") | 265 | 302 | 222 | 240 | 362 | 295 | 404 | 400 |
| Sales units (000) | 20 | 24 | 16 | 18 | 26 | 22 | 32 | 30 |
| Σ(sales unit) | = 4,640 million |
| Σ(total marketing expenses)² | = Sh.809,598 million |
| Σ(total marketing expenses x sales units) | = Sh.61,250 million |
Process | Materials Sh. | Labour Sh. | Overheads Sh. | Total Sh. |
| I | 1,440,000 | 210,000 | 150,000 | 1,800,000 |
| II | - | 100,000 | 180,000 | 280,000 |
| 1,440,000 | 310,000 | 330,000 | 2,080,000 |
| Product | Quantity sold (Kgs) | Closing stock (Kgs) | Sales (Sh.) |
| A | 30,000 | 15,000 | 525,000 |
| B | 45,000 | - | 1,507,500 |
| Element of cost | Total | Process | ||
| Sh. | 1 Sh. | 2 Sh. | 3 Sh | |
| Direct materials(additional) | 87,500 | 30,000 | 40,000 | 17,500 |
| Direct labour | 110,000 | 40,000 | 50,000 | 20,000 |
| Direct expenses | 16,900 | 6,000 | 1,600 | 9,300 |
| 1 | Normal output per process was estimated as follows: Process 1 90% Process 2 95% Process 3 92% |
| 2 | The output of eachn process was as given below: Litres Process 1 5,300 Process 2 5,000 Process 3 4,700 |
| 3 | The loss in each process represented scrap which could be sold at the following prices: Price per unit (Sh.) Process 1 20 Process 2 44 Process 3 65 |
| 4 | There were no stocks of materials or work-in-progress at the beginning or end of the period. |
| 5 | The output of each process passes directly to the next process and finally to finished goods. |
| 6 | Production overhead is absorbed by each process on a basis of 50% of the cost of direct labour. |
| Mashariki Hospital | Kusini Hospital | |
| Number of hospital beds | 780 | 500 |
| Number of in-patients | 23,472 | 8,165 |
| Average stay | 7½ days | ? |
| Number of outpatient visits | 216,500 | 63.920 |
| ? Not recorded but bed occupation percentage was 85%. | ||
| 1 | The following information was provided by the accountants based on the two hospitals: |
| Mashariki Hospital | Kusini Hospital | ||||
| Inpatients | Outpatients | Inpatients | Outpatients | ||
| Direct costs: | Sh. | Sh. | Sh. | Sh. | |
| Supplies and drugs | 1,821,520 | 693.600 | 1,551,350 | 285,450 | |
| Medical staff | 8,729,100 | 3,308,950 | 6,832,700 | 1,975,050 | |
| Support services | 2,210,500 | 2,563,700 | 1,845,380 | 1,591,620 | |
| Indirect costs: | |||||
| General services | 3,524,470 | 1,721.800 | 1.937,410 | 635,600 | |
| Totals | 16,285,590 | 8,288,050 | 12,166.840 | 4,487,720 | |
| 2 | Assume a 365-days year. |
| Degree of completion: | Materials 70% |
| Labour 60% | |
| Overheads 60% |
| Costs incurred | Sh. |
| Transfers from Process 1 | 18,770,400 |
| Raw materials cost | 4,797,200 |
| Conversion costs | 6,317,600 |
| Opening work-in-progress | 300,900 |
| Production | Units |
| Opening work-in-progress 100% complete, apart from Process 2 conversion costs which were 50% complete) | 1,200 |
| Transfers from Process 1 | 112,000 |
| Completed output | 105,400 |
| Closing work-in-progress (100% complete apart from Process 2 conversion costs which were 75% complete) | 1,600 |
| Opening inventory (Units) | 50,000 |
| Valuation | Sh. |
| Materials | 250,000 |
| Labour | 100,000 |
| Overheads | 250,000 |
| Units introduced | 200,000 |
| Cost incurred | Sh. |
| Materials | 1,000,000 |
| Wages | 750,000 |
| Overheads | 700,000 |
| 1 | During the month of April 2019, 150,000 units were completed and transferred to process II. |
| 2 | Closing inventory amounted to 100,000 units with the following degrees of completion: Materials 100% Labour 50% Overheads 40% |
| 3 | Due to the nature of the production process, no losses are anticipated. |
| 4 | The company uses the average cost method to value work-in-progress. |
| 1 | Materials: | M | 1,800 tonnes at Sh.40 per ton. |
| N | Sh.45,640 | ||
| 2 | Labour: | Direct | Sh.25,560 |
| Indirect | Sh.8,640 | ||
| 3 | Overheads: Works 25% of direct costs | ||
| Office 20% of prime cost and works overhead cost | |||
| 4 | Sales Sh.7,400,000. Sales per brick amount to Sh.400. | ||
| 5 | Royalties are paid at the rate of Sh.0.5 per 1,000 bricks. | ||
| 6 | The production is in batches of 1,000 bricks. | ||
| 7 | Stock of finished bricks: | Opening 800,000 | |
| Closing 600,000 | |||
| 1 | The number of suites of each type are: |
| Standard | 100 | |
| Deluxe | 30 | |
| Luxury | 20 |
| 2 | The rent of Deluxe suite is to be fixed as 1½ times the standard suite and that of Luxury as twice the standard suite. |
| 3 | The occupancy level for each suite is as follows: |
| Peak season | Off peak season | ||
| Standard suites | 90% | 50% | |
| Deluxe suites | 80% | 20% | |
| Luxury suites | 60% | 20% |
| 4 | The expenses are as follows: |
| o | Room attendant wages per day when occupied: | |||
| Suite | Peak season Sh. | Off peak season Sh. | ||
| Standard | 20 | 30 | ||
| Deluxe | 30 | 45 | ||
| Luxury | 40 | 60 | ||
| o | Lighting, heating and power for full month, when occupied is as follows: |
| Suite | Lighting (Sh.) | Power (Sh.) | ||
| Standard | 400 | 200 | ||
| Deluxe | 600 | 300 | ||
| Luxury | 800 | 400 |
| o | Other costs (annual): | ||
| Staff salaries | 2,200,000 | ||
| Repairs and renovations | 420,000 | ||
| Linen and laundry | 450,000 | ||
| Interior decorations | 500,000 | ||
| Sundries | 315,500 | ||
| o | Annual depreciation is charged on a straight line basis as follows: |
| Asset | Cost of asset (Sh.) | Rate per annum (%) | ||
| Building | 14,000,000 | 5 | ||
| Furniture and fixtures | 1,000,000 | 10 | ||
| Air conditioners | 2,000,000 | 10 |
| 5 | Peak season is assumed to be 7 months and off-peak season 5 months in a year. One month is taken to have 30 days. |
| 6 | Profit including interest on investment is 25% on cost. |
| Process 1 Sh. | Process 2 Sh. | |
| Direct materials (30,000 units at Sh.20 per unit) | 600,000 | - |
| Conversion costs | 765,000 | 2,262,000 |
| Scrap value of normal loss per unit | 5 | 20 |
| 1 | The output in Process i is transferred to Process 2 and amounted to 26,000 units. |
| 2 | The output in Process 2 consists of three joint products as follows: |
| Product | H | N | T | |
| Quantity (units) | 10,000 | 7,000 | 6,000 |
| 3 | The normal loss for both Process 1 and Process 2 is 10%. |
| 4 | The unit selling prices for H, N and T are Sh.180, Sh.200 and Sh.300 respectively. |
| 5 | All joint products are sold as soon as they are produced. |
| 6 | Sales value method of joint costs apportionment is used. |
| 1 | Process One cost data: Raw material inputs (40.000 kgs) Direct wages Overheads Output: Transferred to Process Two By product Zed Closing work in progress (50% complete as to conversion costs) ........................................................................................................ | Sh.9,620,000 Sh.7,650,000 Sh.1,105,000 30,000Kgs 2,000kgs 8,000kgs |
| 2 | By product Zed retails at Sh.75 per kg. Additional selling costs amount to Sh. 15 per kg. 500 kgs. were sold in 2 July 2015 |
| 3 | Process Two cost data: Additional direct materials Direct wages Overheads Output Finished goods (Exe and Wye) Losses in the process ................................................... | Sh. 3,852,500 Sh.6,099,609.5 Sh 3,828,750 28,000kgs 2,000kgs |
| 4 | The output is produced in the ratio of 2:3 for products Ese and Wye respectively |
| 5 | Normal loss in the process is 2.5% Scrap value per unit is Sh.200. |
| 6 | The selling price per unit of each product is as follows: |
| Exe Wye | Sh.2,000 per Kg Sh.1,218.75.per.Kg. |
| 7 | Joint costs are allocated on the basis of sales revenue at separation point. |